On July 21, 2017, Finance Minister Arun Jaitley formally launched Pradhan Mantri Vaya Vandana Yojana (PMVVY), a pension scheme exclusively for senior citizens (60 years and above) with 8% fixed rate of interest on their savings.
More Details aboutPradhan Mantri Vaya Vandana Yojana (PMVVY):
Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this scheme started offering the scheme from May 4, 2017. The scheme will remain open till May 3, 2018.
- It can be purchased offline as well as online through Life Insurance Corporation (LIC) of India.
- Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly, quarterly, half-yearly, yearly as chosen by the pensioner at the time of purchase.
- PMVVY provides an assured return of 8% per annum payable monthly for 10 years.
- There is a minimum and maximum limit for investment in Pradhan Mantri Vaya Vandana Yojana Scheme. The amount varies according to the pension payment mode chosen viz. monthly, quarterly, half-yearly, yearly.
- The scheme is exempted from the Goods and Services Tax.
- Loan up to 75% of purchase price shall be allowed after 3 policy years to meet the liquidity needs.
- Loan interest will be recovered from the pension instalments and loan will be recovered from claim proceeds.
- The scheme also allows for premature exit for the treatment of any critical or terminal illness of self or spouse. On such premature exit, 98% of the purchase price will be refunded.
- On death of the pensioner during the policy term of 10 years, the purchase price shall be paid to the beneficiary.
- The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidised by the government and reimbursed to the LIC.
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